Convertible securities are defined as “usually a bond or a preferred stock - that can be converted into a different security - typically shares of the company's common stock.” http://www.sec.gov/answers/convertibles.htm From what I have understood it would an investment I would consider from an investor point of view. The convertible nature of these bonds allows an investor an option at participating on the best of both worlds (lender and owner) of the company. From a corporation point of view however it is a different story. The decision of selling convertible securities would depend on the specific situation of the corporation at a

This is the end of the preview. Sign up
to
access the rest of the document.

Unformatted text preview: given point. There are more convenient ways to raise capital like public offerings and bank financing. Having researched the different possible scenarios and how it would affect the corporations financial situation and image by selling convertibles I would consider it a sort of a desperate measure reserved only for desperate times. Ideally my corporation would not have to resort to selling convertibles. References: http://www.sec.gov/answers/convertibles.htm...
View Full
Document